New law clarifies insurance cover

Changes to insurance laws which came into effect this month are likely to benefit consumers and the way they make claims.

As of 6 April, the new Consumer Insurance (Disclosure and Representations) Act 2012 requires insurers to ask consumers for all the information they need before generating and selling a quote.

Previously, it was the policy holder's responsibility to divulge anything that might be relevant to their policy.

The new legislation will stop insurers unfairly rejecting claims because crucial questions, such as criminal convictions and unrelated medical conditions, were not asked before the point of sale or because they were included in the small print of policies.

The Act follows a series of reports by the Law Commission and will cover any insurance policy taken out for personal use including home, car, travel, life, critical illness, income protection, health insurance and pension annuities.

The Association of British Insurers, said: "We want customers to take out insurance policies with the confidence that they are covered. By placing a legal duty on insurers to ask customers all relevant questions at point of sale, people will know exactly what they need to disclose upfront."

"This Act reflects steps taken by the industry over the years to improve customer awareness of what they need to tell their insurer."